By Heinrich Mihe Gaomab II
THE recently released Africa Competitiveness Report 2017 is a special project within the framework of the World Economic Forum’s Global Competitiveness and Risks Team.
It is the result of an excellent collaboration between the World Economic Forum, the International Bank for Reconstruction and Development/the World Bank, and the African Development Bank.
The Africa Competitiveness Report comes out at a challenging and pressing time for the continent, where growth in several African countries has been low, after more than a decade of solid expansion. The slowdown is largely due to depressed low commodity prices, as well as the reduced growth in emerging markets, such as China, and in advanced economies. In order to stem the tide, most African economies have shown strong resilience, with a marked resolve to reform and diversify their economies.
By conducting a comprehensive analysis of Africa’s most pressing competitiveness challenges, the report discusses the continent’s most pressing issue of bridging the demographic dividend of young people, and how to bring them into the mainstream economy, taking into account rapid demographic changes. Africa’s working-age population, which comprises mainly the youth, is expected to soar by 450 million people, or close to 70 percent, by 2035.
The report acknowledges that Africa is full of brilliant, entrepreneurially-spirited, and generally educated young people, but most of them remain on the peripheries of the economy, and is thus calling for youth economic empowerment mechanisms. The number of potential economic agents on the continent is expected to grow to 450 million over the next couple of decades, but Africa’s engines of job creation aren’t keeping up. If enough new positions aren’t created by 2035, Africa may be sailing towards a crisis of youth unemployment. Actually, the report seems to deliver a subtle message that Africa is already in a big “unemployment crisis”, in terms of its youth.
About 13 million of them enter the labour market each year, and only three million get jobs.
Two-thirds of Africa’s youth are unemployed or discouraged. One-third are vulnerable and only one-sixth have meaningful wage employment.
According to the report, African leaders can put into effect structural reforms that improve young people’s livelihoods and prospects. There is need to prepare the youth as responsible members of the community and partakers in the economic wealth of the country, through an entrepreneurial drive, mentorship and guided and supported training. These can ideally position the youth as future assets, who are firstly earning future good incomes, and who, secondly, manage, control or drive, entrepreneurially, income-generating processes, such as small and medium-sized enterprises (SMEs).
Thirdly, youth should own existing or upcoming economic ventures; and lastly, they should possess marketable, entrepreneurial and sustainable skills.
The report examines how the youth population explosion can either help to achieve broader shared prosperity and improve the livelihood of African people or become a source of fragility, social tension, terrorism, and economic hardships. It does so by examining the potential of Africa’s fast-growing youth population, to catalyse economic development through accelerating rates of job creation. It also discusses the potential of cities, where most of the youth are attracted to, to transform, strengthen and diversify Africa’s economies, by creating more dynamic urban manufacturing businesses and service sectors. The report emphasises the importance of ensuring that the youth of today, who are leaders of tomorrow, possess the skills and education they need to build vibrant and inclusive economies.
The African Development Bank has a great interventionist plan to address this, with the bank’s ‘Jobs for Youth in Africa’ programme.
‘Jobs for Youth in Africa’ is a bank-wide strategy, which will create 25 million jobs and positively impact 50 million youth, over the next decade.
To accomplish this goal, the Jobs for Youth in Africa Strategy 2016-2025 aims to increase inclusive employment and entrepreneurship, strengthen human capital, and create durable labour market linkages, by making use of three strategic intervention areas – integration, innovation and investment.
One timeless adage remains as a parting shot from the report – that Africa’s growing young population offers the prospect of transforming the continent. This can only be realised, however, if there are well-targeted investments in physical and human capital, which will serve as determinants for youth empowerment, reinforced by a sound regulatory and institutional framework, and an enabling business environment.
Businesses can advocate for reforms that enhance youth empowerment into the mainstream of the economy, through increased productivity.
Governments can ensure sustained investments in infrastructure, health, and education, and provide the legal and regulatory framework for a sound business environment for trade and investment.
And most importantly, ensure that policies and their implementation are consistent across time and national boundaries, for enhanced youth economic empowerment mechanisms. The analysis in the 2017 Africa Competitiveness Report aims to contribute toward seizing this opportunity, for the continent’s current and future generations.
*Heinrich Mihe Gaomab II is the Executive Director of the African Development Bank, representing Angola, Namibia, Mozambique and Zimbabwe.
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